Self-reactive T cells are controlled by both central tolerance in the thymus and peripheral tolerance involving a variety of mechanisms. While genetic studies have established that peripheral tolerance is essential for preventing autoimmune diseases, no serious autoimmune disease has been attributed to defective central tolerance. Meanwhile, whereas it is well established that costimulatory molecules B7-1 and B7-2 play critical roles in the induction and effector function of T cells, their role in T cell development has not been well appreciated. We have recently demonstrated that perinatal blockade of B7-1 and B7-2 leads to an accumulation of autoreactive T cells in the thymus and prevents clonal deletion of autoreactive T cells, and that when transferred to immune-compromised hosts, these autoreactive T cells cause severe multiple organ inflammation with early lethality for young mice. These results reveal that costimulatory molecules B7-1 and B7-2 play an important role in T cell negative selection in the thymus and raise the intriguing possibility that defective central tolerance may contribute to the exacerbated autoimmune diseases in mice with germ-line mutations of CTLA4, CD28, or B7-2. Here we propose to systematically investigate the roles for CD28, CTLA4 and their shared ligands B7-1 and B7-2 in T cell clonal deletion and in the development of autoimmune diseases. Since these molecules are proposed to be involved in the development and/or function of CD25+CD4 T cells, we will also determine whether the autoreactive T cells that escape T cell clonal deletion can be effectively controlled by the regulatory T cells, and whether CTLA4 is critical for the regulatory function of the CD25+CD4 + T cells. Our proposed study will establish the function of B7-1 and B7-2 in negative selection of autoreactive T cells and evaluate the contribution of defective T cell clonal deletion and regulatory T cells to the development of autoimmune disease, a central tenet in contemporary immunology.